The UK has the highest property taxes of any advanced economy around the world, new analysis shows as many households and businesses brace for a bills hike next week.
The country’s property tax burden – which includes council tax, business rates, and stamp duty – was 3.7% as a proportion of gross domestic product (GDP) in the 2023/24 tax year.
This was higher than in any other developed nation, according to analysis by tax and software firm Ryan of data from the Organisation for Economic Cooperation and Development (OECD).
Luxembourg came in at number two, with a 3.5% property tax-to-GDP ratio, France was third, also at 3.5%, Canada was fourth, at 3.4%, and Korea was in fifth place, at 3.3%, the latest rankings show.
Israel dropped to sixth place with a ratio of 3.2%, despite having the highest property tax burden two years before.
The UK’s ratio remained significantly higher than the 2.7% average of the group of seven (G7) of the world’s most advanced economies, Ryan found.
It was nonetheless 0.3 percentage points less than the prior year, after some businesses benefited from a bigger discount on business rates.
The analysis comes as taxes are set to rise for households and businesses from April, when the new tax year begins.
Council tax bills will rise by 5% in April for the third year in a row, with almost all councils increasing rates up to, or close to, the maximum permitted.
It means the average annual bill for band D, the standard measure of council tax, will rise by £109 this year to £2,280.
Most councils chose to impose the increases this tax year, to cover growing cost pressure and rising demand for support services.
Furthermore, stamp duty relief will become less generous next month, when first-time buyers in England and Northern Ireland will have to start paying the tax on properties over £300,000.
At the moment, people buying their first home do not have to pay any stamp duty if the property costs less than £425,000.
Meanwhile, many shops, venues, and hospitality firms are facing a bigger tax bill next month when a discount on business rates will be reduced from 75% to 40%.
The changes were announced in last year’s autumn Budget, with the Government committing to keeping the discount scheme for the next financial year but cutting the level of relief.
